http://en.wikipedia.org/wiki/FairTax
The FairTax is a proposed change to the tax laws of the United States that would replace the Internal Revenue Service (IRS) and all federalincome taxes (including corporate taxes and capital gains taxes), as well as payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a national retail sales tax. Its enacting legislation, the Fair Tax Act (HR25/S1025) has been introduced in the United States Congress. The tax would be levied once at the point of purchase on all new goods and services. The proposal also calls for a monthly payment to all households of citizens and legal resident aliens (based on family size) as an advance rebate of tax on purchases up to the poverty level.[1][2] The sales tax rate, as defined in the legislation, is 23 percent of the total price including the tax ($23 of every $100 paid—calculated similar to income taxes). This is equivalent to a 30 percent traditional sales tax ($23 on top of every $77 spent).[3] Since income taxes have a hidden effect on prices,[4] it is expected that moving to the FairTax would decrease production costs (due to the removal of business taxes and compliance costs), which is predicted to offset a portion of the FairTax effect on prices (degree based on monetary policy
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